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Edinburgh Woollen Mill Gets 10-Day Extension to Cobble Rescue Package

Edinburgh Woollen Mill Group got the U.K. High Court’s approval for a 10-day extension on its deadline to appoint an administrator.

The hope is that the knitwear specialist can ink a deal with a suitor to avoid an all-out collapse into administration, the equivalent to bankruptcy in the U.S. EWM owner Philip Day last week was still cobbling together a rescue package for the company, which two weeks ago filed a notice of intent to appoint administrators that expired on Thursday. Day has been in talks with U.S. hedge fund Davidson Kempner to inject capital into the distressed business, which would salvage fashion value chain Peacocks, but leave EWM’s future in doubt.

In September, potential buyers started circling EWM-owned Jaeger, which includes the Austin Reed and Jacques Vert brands. EWM hired FRP, which is expected to be named administrator, to review the brands, and conduct a valuation of the EWM business.

Torque Brands and Fraser Group CEO Mike Ashley, who has a holding in Sports Direct, have been named as possible suitors for Jaeger. Torque recently acquired shirt-maker TM Lewin, while Ashley is also in the running for the insolvent retail chain Debenhams. Ashley once held a 30 percent stake in the bankrupt retailer, but got wiped out when lenders took over the chain last year. He reportedly upped his offer for the chain, and has until end-of-day Wednesday to make a binding commitment. Lazard, which is conducting the Debenhams auction, is seeking a 300 million pound ($390.9 million) rescue bid for the chain, according to U.K.’s Retail Gazette.

As the process moves on for EWM, unprofitable Peacocks stores would likely get closed, while the EWM brand stands a good chance of shutting down. The Scottish knitwear brand operates about 400 stores, with many housed in tourists locations, areas that don’t see much activity these days due to the Covid-19 pandemic.